Costa Rica Launches Strategy to Combat Money Laundering, Terrorism Financing

Costa Rica Launches Strategy to Combat Money Laundering, Terrorism Financing

By Dialogo
August 21, 2015

More security needs to be placed in the towns and villages of Costa Rica, but a good example for adolescents. We are all grateful for what you are doing, but listen to the citizens to see what they think.

Costa Rica’s National Strategy to Counter Money Laundering and Terrorism Financing is a far-reaching initiative aimed at creating new tools to aggressively combat those crimes.

Government officials presented it during the XXXI Plenary Meeting of the Latin America Financial Action Task Force (GAFILAT), held July 9-10 in the nation's capital of San José.

The plan is based on the regional group’s 40 recommendations, and among other things, proposes legislation to fight money laundering and terrorism financing.

The strategy specifically rests on the principles that comprise the core of the GAFILAT’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) system: prevention, detection, intelligence, investigation, and criminal justice.

Through its action plan, the initiative aims at “shielding the country from money laundering and terrorism financing through compliance with the 40 recommendations,” Director General of the Costa Rican Institute on Drugs (ICD) Guillermo Araya said. “In general, the strategy’s contents are the components of the GAFILAT's anti-laundering system.”

Next step is implementation

The initiative’s next step is implementation, which includes producing specific legislation and developing a metrics system, using statistics, to measure its effectiveness.

The ICD is working to create “a whole information and statistics system ... to monitor and follow both fulfillment and effectiveness of actions and to strengthen the entire control system,” Araya said.

As part of the broad strategy to fight money laundering and terrorism, the ICD is also working on developing an asset forfeiture law. The law “goes after assets – more than anything, economic capital – of criminal organizations, not after people,” Araya added.

In developing specific legislation and other measures to carry out the strategy, the ICD is focusing on industries and businesses that are at highest risk of being penetrated by organized crime operatives who engage in money laundering. These include casinos, accounting firms, the real estate industry, dealers of precious metals and stones, and trust and company service providers, including lawyers and notaries.

This is a “risk-based focus” on activities that have the highest chances of being penetrated by a money-laundering operation, Anaya said.

This focus ranks activities according to risk levels, Araya explained, adding that the ICD plans to assign 80 percent of its personnel to monitor the 20 percent of activities at higher risk levels.

Accordingly, 78 members of the ICD’s staff are assigned to these areas: asset administration, prevention, intelligence, and control over precursors and essential chemicals. The other 14 staff members comprise the Financial Intelligence Unit (UIF), which deals with monitoring transactions and suspicious operations reports.

Taking aim at organized crime's finances

Developing specific legislation to target the assets of drug traffickers and other organized crime groups is a key component of the initiative.

“It will go after the input that gives them power to penetrate the state’s structure, the private sector structure, and national economies,” Araya said, adding the law would “prosecute illicit economic capital.”

The private sector's role

The state is not alone in its efforts to stop organized crime groups and drug traffickers; the private sector is a strong ally in the effort, according to Anaya, who added that “a very important synergy has remained” as a result of the GAFILAT meeting in July.

“We’ve seen and felt the private sector’s support and involvement with the state, giving everything to armor the country to avoid penetration by money laundering, corruption, and organized crime,” he said.

GAFILAT is an offshoot of the Financial Action Task Force of South America (GAFISUD), which area security officials created in December 2000 to wage a regional combat against money laundering.

Initially made up of nine South American nations, the 9/11 terrorist attacks in the U.S. led GAFISUD to widen its action scope to include terrorism funding.

Officials changed the name during the group's 2014 meeting, when authorities called the group GAFILAT to widen its membership to include all Latin American nations.

GAFILAT is comprised of 16 countries.